Month: July 2013
The Indian government few days back met one of the key demands of the telecom operators and bodies by raising the Foreign Direct Investment (FDI) limit in the telecom sector to 100 percent. The move is believed to provide huge confidence in the telecom industry for foreign players, and most importantly help reduce the hefty debt burden.
According to an estimate, the Indian telecom services industry is suffering a debt burden of over $40 billion. The burden is despite the fact that India has one of the largest telecom subscriber bases – around 897.02 million.
Raising of the FDI cap is expected to turn around things for the industry. But of course, this is easier said than done. Considering the depressing economic atmosphere in the country, will the turnaround happen? What does 100 percent FDI in telecom sector actually mean for users as well as the industry? What impact does it have on the industry?
There are two aspects to it. One is the foreign partners, the likes of Vodafone, Telenor and Sistema, they will be immediately interested in hiking their stake to total 100% compared to 74% earlier. They will be really interested in taking over the control of the company and will try to forego the problems or the worries they have in dealing with the local partner. The other aspect is that when we talk about companies like Bharti, Idea and RComm which already have some existing foreign partners except RComm which is only domestically-owned, some of these foreign partners can also look at injecting some equity because both Bharti and Idea will to a certain extent be interested in attracting some foreign investments to repay their existing debt.
Financial gains and consolidation
The Cellular Operators of India (COAI), the GSM industry body, reportedly in one of its presentations to the Department of Telecommunications (DoT), had pointed out the weak financial health of the sector, which was reeling under a massive debt of Rs. 1,857 billion.
With FDI gates opened, the telecom sector can garner the much-needed additional funds in coming months. The fresh inflow of money and reduced burden on local entrepreneurs will help the industry provide better quality services as well as adoption of the latest technologies. The industry is likely to have further consolidation with foreign players, who may eye the smaller players in the country.
Welcoming the 100 percent FDI in telecom, Sistema Shyam TeleServices Ltd said in a statement: “The much needed policy decision is a very positive development for the entire industry. With fresh foreign direct investments coming in, this would further catalyze growth and also the process of proliferation of telecom services across the country.”
Reliance Communications (RCom) says the move will help enhance value for all stakeholders. “RCOM strongly supports the Government’s decision to allow 100% FDI in the Telecom sector. 100% FDI in Telecom will enhance value for all stakeholders,” says a company spokesperson.
“ The move to increase the investment cap of 74 percent FDI to 100 percent is welcome as it will help the industry to bring in more FDI to fund the high CAPEX demands of this sector especially in areas to enhance coverage, and launch new 3G and BWA services. This will undoubtedly have a huge benefit for our customers and higher license fee for the government,” says Aircel in a statement.
But market cannot afford more than six profitable telcos in the industry. From the existing situation where we have 10 telcos, we expect the consolidation to take place to an extent that only six players will remain in this industry.
Likely buyouts and mergers
Apart from Bharti Airtel, most of the telecom operators in India may look for buyouts or mergers. Vodafone, the second largest operator in the country, is likely to buyout the 11 percent stake held by Piramal Group and the remaining shares of Essar Group.
Russian conglomerate Sistema holds a 73.71 percent stake in Shyam Sistema with Shyam Telelinkm and operates under the MTS brand in the country. SSTL was the only bidder in the March 2013 auctions for the CDMA spectrum. The Russian conglomerate may increase its stake in its India venture.
A similar deal is expected between Tata and Docomo. NTT Docomo currently has 26 percent stake in Tata Docomo. The new FDI limit may encourage the Japanese company to raise its share. Aircel was reported to be in talks for a stake sale from Malaysian company Maxis Communications, which has the majority stake in the company.
As far as Bharti Airtel and Idea Cellular go, these two companies have foreign holding less than 74 percent. These companies may not look for such deals in the near future. Bharti has stakes from Singapore Telecom and Qatar Foundation. Idea has about 19.96 percent stake from Axiata.
Why FDI may not have significant impact
Contrary to the general and popular belief, some analysts believe the increased FDI limit in the country is going to have a very limited impact on the sector.
“ The impact will be limited since the problems faced by telecom companies are to do with regulation and licensing not investment per se. Some tower companies which are 100% foreign owned (e.g. American Tower) could benefit. They do not require licences. However, they would have been obliged to dilute ownership if the government required them to obtain Unified Licences, as the TRAI has recommended,” says telecom analyst Mahesh Uppal.
According to a Wall Street Journal report, analysts are sceptical about foreign players investing in the sector that has been marred by allegations of corruption as well as regulatory uncertainty.
“ For consolidation to happen in India as well as to attract new players to the Indian telecom market, we need a comprehensive framework to provide clarity on all regulatory issues,” Saurabh Agrawal, who heads corporate finance for South Asia at Standard Chartered Bank, is quoted as saying.
Forbes India’s author, Mohammad Chowdhry in his report says the move will not change the fundamentals of the industry.
“ …further fundamental change will depend on greater clarity on spectrum policy, as well as demystification of the mergers and acquisitions environment by making it easier for players to acquire and sell spectrum rights separately from the rest of the business,” writes Chowdhry.
Interestingly, the new FDI policy for telecom has seen opposition outside in the industry. According to Tamil Nadu chief minister J Jayalalitha, the move raises a number of concerns.
“These measures raise a number of serious concerns. Far from protecting the interests of workers and the common people of the country, the UPA government appears to be acting at the behest of foreign interests and some external Rating Agencies which are frequently threatening to lower the Sovereign Rating to ‘Junk Status’ and thereby cowing down the weak UPA government at the Centre, making it bend to its whims and fancies,” the chief minister said in a statement.
On risks involved in the FDI, analyst Mahesh Uppal says: “The “colour” of money is not the issue. However security concerns related more to services, networks and equipment. This is a serious concern in the light of recent disclosures including PRISM and reported concerns in US and UK about Chinese equipment.”
More measures required
Raising the FDI limit is certainly a welcome step, but it’s only one of the many much-needed solutions to our cash-strapped telecom industry. There is a lot more to be done to recover the industry.
The government needs to bring more clarity in its policies related to regulation, licencing and taxation. Taking lessons from 2G scam, the allocations have to be made in more transparent manner. Tussle over the inter-circle roaming, licence renewals and other issues are unlikely to send a positive message outside.
The industry has to come out of the shadows of corruption and the state of confusion where there’s an apparent lack of vision for the industry. It’s notable the industry already had a decent 74 percent cap of FDI, but still failed to gain ground.
Without the availability of a conducive atmosphere, it’s highly unlikely the telecom sector moves towards the path of recovery.
Nokia is working on a proximity sensor accessory for its Lumia phones – interestingly named, Treasure Tag – that will allow users to track things through their phones, if a new report is to be believed. According to a report by The Verge that cites sources familiar with company’s plans, Nokia will soon launch the accessory that features Bluetooth 4.0 and NFC to track items through an app on the user’s phone. The device will be able to stay ‘always on’ and it will come with a battery that will last six months.
As per the report, users will be able to pair the Treasure Tag accessory with their Nokia Lumia Phones through NFC, and the Finnish handset-maker will bundle a loop strap to attach the device to an object, say a bunch of keys. It further adds that Nokia has developed a Treasure Tag app for Windows Phone, through which users will be able to manage the sensor and locate the device when it gets out of sight. The app will also show the location of the device on a map, integrated with Nokia’s LiveSight augmented reality view. Users will also be able to track a phone that’s connected to the device through a button located on the device, as it will trigger a siren on the phone if it’s in range.
It’s worth pointing out that the device will work with Bluetooth 4.0 and Bluetooth Low Energy standards. The forthcoming Amber update for Nokia Windows Phones is expected to bring support for Bluetooth 4.0 and for Bluetooth Low energy devices (Bluetooth Smart) to Nokia Lumia 520, Nokia Lumia 620 and Nokia Lumia 720 devices. Following the update, the phones will be able to connect and work with devices such as fitness monitors like Fitbit Flex and smart watches like Pebble. The Nokia Lumia 920 already supports Bluetooth 4.0.
Sony has launched its biggest-ever smartphone, the Xperia Z Ultra, at a price point of Rs. 46,990. The phone will be available starting August 2, in Black, White and Purple colours.
The Sony Xperia Z Ultra sports a sleek look with a thickness of 6.5mm, and weighs 212 grams. It features a 6.4-inch full-HD display with a resolution of 1080×1920 pixels. It is the first smartphone display that integrates Sony’s Triluminos technology, which the company introduced at CES with its Bravia televisions. Sony claims that through the technology the display reproduces a greater range of rich, natural colours to deliver true, natural shades. The technology also includes X-Reality for mobile, Sony’s intelligent super resolution display technology which as per the company, analyses each image and reproduces lacking pixels to optimise quality for the sharpest videos.
Xperia Z Ultra is powered by a 2.2GHz quad-core Qualcomm Snapdragon 800 processor coupled with 2GB of RAM. It offers 16GB of internal storage that can be expanded up to 64GB via microSD card.
The Xperia Z Ultra sports an 8-megapixel Exmor RS rear camera and a 2-megapixel front facing camera. The device includes LTE, NFC, Wi-Fi, 3G, DLNA and Bluetooth connectivity options. It has a 3,000mAh battery that Sony claims could deliver up to 14 hours of talktime and 768 hours of standby time.
Just like the Xperia Z and Xperia Z Tablet, the Xperia Z Ultra is also dust and water proof and comes with IP55 and IP58 certification. The Sony Xperia Z Ultra comes with handwriting recognition support and the device’s screen can work with a pencil or a stylus/ pen that has a tip of more than 1mm(in diameter). It also comes with new and updated Sony Media Applications that include apps like Walkman, Movies and Album, in addition to apps related to handwriting recognition and some India specific apps such as Sony LIV catch up tv app and Sony Music Jive app. The phone will also bundle a month’s access to BigFlix movie streaming app and the full version of the Asphalt 7 game.
Sony also announced some accessories including a stereo Bluetooth headset, magnetic charging dock and a cover with an additional battery, all available for an extra cost.
As each new beta version of an iOS software is released, spotting the differences gets a little trickier. But there are some key differences between previous versions of iOS 7 beta and the one released yesterday. First of all, the phone buttons have been changed to make them more distinct. Instead of being completely right-angled rectangles, they’ve gone back to Apple’s tried and trusted rounded corners.
As you can see from the images above, the translucency of the ‘decline’ and ‘answer’ buttons has been toned down, to make the interface more solid. The gaps between each button are bigger, and the ‘remind me’ and ‘message’ buttons have some new icons to go along with them.
There are a couple more changes too. With Spotlight in iOS 7, you’ll already know that accessing the search tool is achieved by dragging down from any part of any home screen. It stumped a few of us in the beginning, and Apple knows that, so the company opted to add in a ‘Spotlight has Moved’ popup with a short instruction on how to access it within the latest iOS beta. Spotlight also features a new ‘cancel’ option to the right of the search bar.
Some changes to the Lock Screen eliminate the frustration of misunderstanding the relationship between the ‘slide to unlock’ text and the upward arrow for Control Center. I’m happy to admit that on occasion (even though I know how to use it) I’ve instinctively placed the two together and tried swiping upwards to unlock my phone, only to be shown the Control Center interface. Apple’s new Lock Screen replaces the upward and downward arrows for Control Center and Notification Center with flat, pill shaped icons. ‘Slide to unlock’ has a small arrow to the left pointing right, with a gradient changing from left to right swiping across the ‘slide to unlock’ text.
More, minor changes
1. If you happen to like snoozing your alarm in the morning, you’ll be glad to know that beta 4 now counts down your snoozing time on screen so you can easily keep an eye on how long you’ve got left to sleep.
2. New app icon gradients. Apple has toned down a few of the blue icons. Instead of having a very bright and colorful light blue blending in to dark blue, the lighter color has been toned down. Mail, App Store and Safari now look much better as a result.
3. Safari’s bookmarks, reading list and shared links have been changed to icons only, instead of text labels.
4. Messages app now shows first name, and first initial of surname at the top of each conversation instead of the contact’s full name.
Found anything new in beta 4, leave what you notice in the comment section.
If the rumors are right, Apple will be announcing new hardware in just over a month, which would mean that iOS 7 should be closing in on its final form soon. Today saw the release of iOS 7 beta 4, and the change log for the new beta release has a couple interesting additions, including possible confirmation that there will be a fingerprint scanner on a new Apple product.
For the most part, beta 4 is filled with bug fixes more than anything else, but developer Hamza Sood has uncovered what looks to be solid evidence that new Apple hardware will include a fingerprint scanner. In the update package, Sood found a folder labeled “BiometricKitUI”, which was a good indicator, but the code carried the real smoking gun.
The code for iOS 7 expressly describes the set-up process for a fingerprint scanner embedded in the iPhone Home button. During the set-up tutorial, there will apparently be a photo showing “a person holding an iPhone with their left hand while touching the Home button with their thumb”, and “A fingerprint that changes colour during the setup process.”
We had heard before that the iPhone 5S had production delays because of the fingerprint scanner, and this seems to confirm the hardware. This would be a pretty big change for an “S” iPhone, which usually just focuses on internal specs boosts.
A report out of Taiwan on Monday suggests that contract manufacturer Foxconn is about to add 90,000 workers at its Shenzhen factory to help assemble new Apple devices like the Apple iPhone 5S and the low-cost model of the iPhone, possibly called the Apple iPhone 5C. The report says that the contract manufacturer has already tested the assembly of the next iteration of the Apple iPhone and is ready to start rolling the phone off of the assembly lines.
Earlier this year, Foxconn’s assembly plant in Zhengzhou went on what was characterized as a “hiring spree” to prepare for the next versions of the Apple iPhone and Apple iPad. The nApple iPhone 5S is believed to include a faster processor, improved 13MP rear camera with dual LED flash, longer lasting battery, and a fingerprint scanner. The latter, which has been rumored to be a feature on a new iPhone mode for sometime, was apparently leaked in a file found on iOS 7 beta 4. The file, called “BioMetric Kit UI” reveals that there will be a tutorial with a picture showing “a person holding an iPhone with their left hand while touching the Home button with their thumb”, and “a fingerprint that changes color during the setup process”.
Other specs believed to be part of the Apple iPhone 5S include a 4 inch screen and 2GB of RAM and there possibly will be a plastic case with multiple color options for the buyer.
We don’t often say many good things about the US Patent and Trademark Office (USPTO), because we don’t think the office does much good in the world of software patents. Frankly, we’re not sure software patents should exist at all, because they are often little more than logical conclusions, or digitized versions of physical objects; and, they don’t seem to lead to much other than wasted court fees. Still, as much as we criticize, we do need to point out when the USPTO gets one right, and the USPTO has rejected Apple’s pinch-to-zoom patent claim.
The patent for pinch-to-zoom was filed in 2007, and awarded to Apple in 2010. It covered how software would distinguish between the scrolling movement of one finger and two-fingers gestures like pinch-to-zoom on a touchscreen; and, the patent has been a big part of Apple’s $1 billion win over Samsung in court. So, this new ruling could have a significant impact on Samsung’s appeal bid.
The USPTO had issued a preliminary ruling in December 2012 that the patent claims were invalid; and, today in a “final office action”, all 21 claims by Apple were rejected for either being anticipated by previous patents or for being unpatentable. Looks like it only takes the USPTO 6 years to work through a patent to figure out it’s a logical conclusion. We’re sure that will help the office work through the huge backlog of patents it has on its hands.